Intergovernmental Fiscal
Transfers and Adaptation
to Climate Change
Dr. Sonny Mumbunan
Research Centre for Climate Change
University of Indonesia – RCCC UI
The Governance of Adaptation: International Symposium
March 22-23, 2012, Amsterdam, the Netherlands
The overview
 Background
 Question
 Framework
- 3E criteria
- Responsibility assignments and public functions
- Fiscal transfers for adaptation
 Concluding notes
 Financial needs for adaptation measures still
far outweigh the available fund
 Risks and vulnerabilities from CC are unevenly
distributed among jurisdictions (rural/urban,
district/municipality, poor/rich countries)
 CC impacts occur at different scales – so do
CC adaptation actions and measures
 Different actors at different scales and public
agencies are important in public goods
provision for adaptation measures
Scientific interests
 The relationship between scales in CC adaptation;
Really, is there an ‘adaptation paradox’ (Ayers
 The importance of scale and public financing in
CC adaptation have begun to be addressed (e.g.
Swart et al 2009; Termer et al 2011). So far, rather
casually – not a systematic treatment.
Scientific interests (continued)
 The notion of agency-scale and the challenges of
Ostrom’s polycentricity as an enabler to
adaptation (Boyd and Kjellen, in progress)
The differentiation between public provision (i.e. by
state actors) and public production for adaptation (i.e.
by individuals and communities for state-based
public provision)
Policy interests
 The present need of policy response: effective,
efficient and equitable set of (financing)
instruments for CC adaptation in light of
differences in scale and governmental relation
The question
How to conceptually build a
meaningful relationship between
adaptation measures to climate
change and intergovernmental
fiscal transfers in a multi-layered
system of governance at different
jurisdictional scale?
The framework
The framework
Note: UNFCC Adaptation Fund
 Source of fund: CDM mechanism; potentially
from international ‘adaptation levies’ e.g.
International Air Travel Adaptation Levy (IATAL)
or bunker fuels under International Maritime
Emission Reduction Scheme (IMERS)
 It is on the revenue side
 Question: how to allocate and distribute the
fund to different scales of government?
Note: UNFCC Adaptation Fund
Governance issue: Interactions at international
and supranational levels should be incorporated
(read: institutionally arranged) into the national
system of governmental structure and relations
For example:
- REDD mechanism in CC mitigation
- Or, adaptation fund under GEF channeled through
institutions like UNDP, UNEP, the World Bank?
The framework
The 3Es criteria in adaptation
 Effectiveness – in meeting desired adaptation
 Efficiency – the use of resources; incentive
structure in terms of cost and benefit
 Equity – sharing or equalizing the burden
The 3Es criteria in adaptation
 Effectiveness
- Outcome oriented in addressing CC adaptation
 Efficiency
- Economies of scale
- Public goods and ‘correspondence principle’
 Equity
- Fiscal gap approach for regions with weak
fiscal capacities
Scaling up or down?
On responsibility assignments
Public functions for adaptation
Fiscal transfer instruments
 General-purpose transfers
Lower level governments have full discretion on its use
(block grant)
 Specific-purpose transfers
Outcome oriented, for priority sectors and measures
 Revenue-sharing arrangement
Sharing arrangement of revenues from taxes or sectorbased revenues (marine, forestry, infrastructure, etc)
Transfer instrument for adaptation
Transfer instrument for adaptation
 “Ecological fiscal transfers” are already in place
to address ecological issues in general
(Mumbunan, 2011)
 In CC, intergovernmental fiscal transfers have
been proposed for mitigation measures
Most of which are in form of revenue-sharing
arrangement (e.g. Busch et al 2011; Indartik
Nurfatriani and Ginoga 2011)
The framework
Concluding notes
 The options for intergovernmental fiscal
transfers for CC adaptation are there
 Mixed instruments of transfer to fulfill multicriteria of adaptation measures
Thank you for your attention!
Dr. Sonny Mumbunan
Research Centre for Climate Change
University of Indonesia – RCCC UI
E-mail: [email protected]
Gedung Rektorat Lt. 8,5
Kampus UI Depok, 16424

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